K L Channakeshava , Bangalore V. The Income Tax Officer Ward-6(2)(1), Bangalore

ITA 2577/BANG/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 5082 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-02-2021
• Assessment Year: 2014-2015
• Appeal Filed On: 12-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KANNAN NARAYANAN J
• Assessee Lawyers: H GURUSWAMY ITP
• Keywords: Condonation of delay
• Section: 143(2); 208; 68; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES A, BANGALORE BEFORE SHRI CHANDRA POOJARI, AM & SHRI GEORGE GEORGE K, JM ITA NO.2577/BANG/2018 : ASST.YEAR 2014-2015 SHRI K.L.CHANNAKESHAVA NO.705/A, 14 TH CROSS, 1 ST STAGE 1 ST PHASE, CHANDRALAYOUT VIJAYANAGAR BANGALORE 560 079. PAN : AFSPC0556J. V. THE INCOME TAX OFFICER WARD 6(2)(1) BANGALORE. (APPELLANT) (RESPONDENT) APPELLANT BY : SRI.H.GURUSWAMY, ITP RESPONDENT BY : SRI.KANNAN NARAYANAN, JCIT-DR DATE OF HEARING : 09.02.2021 DATE OF PRONOUNCEMENT : 10.02.2021 O R D E R PER GEORGE GEORGE K, JM : THIS APPEAL AT THE INSTANCE OF THE ASSESSEE IS DIRECTED AGAINST CIT(A)S ORDER DATED 17.01.2018. THE RELEVANT ASSESSMENT YEAR IS 2014-2015. 2. THERE IS A DELAY OF 110 DAYS IN FILING THIS APPEAL. THE ASSESSEE HAS FILED A PETITION FOR CONDONATION OF DELAY AND ALSO AN AFFIDAVIT STATING THEREIN THE REASONS FOR BELATED FILING OF THIS APPEAL. THE LEARNED DEPARTMENTAL REPRESENTATIVE WAS DULY HEARD ON THE DELAY CONDONATION PETITION. WE HAVE PERUSED THE REASONS STATED IN THE AFFIDAVIT FOR BELATED FILING OF THIS APPEAL. THE DELAY IN FILING OF THIS APPEAL CANNOT BE ATTRIBUTED TO ANY LATCHES ON THE PART OF THE ASSESSEE AND THERE IS SUFFICIENT CAUSE FOR CONDONATION OF DELAY. ACCORDINGLY, WE CONDONE THE DELAY IN ITA NO.2577/BANG/2018 SRI K.L.CHANNAKESHAVA. 2 FILING OF THIS APPEAL AND PROCEED TO DISPOSE OF THE APPEAL ON MERITS. 3. THE SOLITARY ISSUE THAT IS RAISED IS WHETHER THE CIT(A) HAS ERRED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER U/S 68 OF THE I.T.ACT AMOUNTING TO RS.81,48,424. 4. THE BRIEF FACTS OF THE CASE ARE AS FOLLOW: THE ASSESSEE IS AN INDIVIDUAL. FOR THE ASSESSMENT YEAR 2014-2015, THE RETURN OF INCOME WAS FILED ON 30.11.2014 DECLARING INCOME OF RS.18,84,750. THE ASSESSMENT WAS TAKEN UP FOR SCRUTINY BY ISSUANCE OF NOTICE U/S 143(2) OF THE I.T.ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF CASH DEPOSITS AMOUNTING TO RS.87,32,900 IN HIS SAVINGS BANK ACCOUNT WITH CANARA BANK. THE ASSESSEE VIDE LETTER DATED 01.11.2016 STATED THAT CASH WITHDRAWALS FROM VARIOUS BANKS, I.E., CORPORATION BANK, OD ACCOUNTS OF CANARA BANK, REPRESENT THE CASH DEPOSITS IN CANARA BANK SB ACCOUNT NO.692 TOTALING TO RS.87,32,000. THE ASSESSING OFFICER, HOWEVER, DID NOT ACCEPT THE SUBMISSIONS MADE BY THE ASSESSEE FOR THE REASON THAT THE CASH WITHDRAWALS MADE FROM VARIOUS BANKS IN APRIL 2013 WERE DEPOSITED IN JUNE 2013 AND SOME OF THE CASH WITHDRAWALS MADE IN JULY 2013 WERE ONLY DEPOSITED IN NOVEMBER 2013, DECEMBER, 2013, JANUARY 2014 AND MARCH 2014. ACCORDINGLY, THE A.O. WAS OF THE VIEW THAT SINCE CASH DEPOSITS ARE MADE AFTER 3 TO 4 MONTHS FROM THE DATE OF WITHDRAWALS, IT IS NOTHING BUT AN AFTERTHOUGHT TO AVOID PAYMENT OF TAX. HOWEVER, THE A.O. GAVE CREDIT FOR A SUM OF RS.5,84,476 BEING AMOUNTS RECEIVED FROM THE ITA NO.2577/BANG/2018 SRI K.L.CHANNAKESHAVA. 3 CUSTOMERS OF THE ASSESSEE. THE DIFFERENCE OF DEPOSIT OF RS.81,48,424 (87,32,000 5,84,476) WAS ADDED TO THE TOTAL INCOME AS PER THE PROVISIONS OF SECTION 68 OF THE I.T.ACT. 5. AGGRIEVED BY THE ADDITION OF RS.81,48,424, THE ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. BEFORE THE CIT(A), THE ASSESSEE FURNISHED WRITTEN SUBMISSIONS ALONG WITH RESPECTIVE BANK ACCOUNTS IN SUPPORT OF HIS CASE THAT CASH DEPOSITS WERE MADE IN THE SAVING BANK ACCOUNT REPRESENTED THE AMOUNTS WITHDRAWN FROM VARIOUS CURRENT ACCOUNTS AS WELL AS OD ACCOUNT. THE CIT(A), HOWEVER, DID NOT APPRECIATE THE SUBMISSIONS MADE BY THE ASSESSEE AND DISMISSED THE APPEAL OF THE ASSESSEE. THE RELEVANT FINDING OF THE CIT(A) READS AS FOLLOW:- 8. THE AO HAS BROUGHT TO TAX THOSE CASH DEPOSITS WHICH WERE NOT ADEQUATELY EXPLAINED BY APPELLANT. THE APPELLANT HAS SOUGHT TO EXPLAIN THE SAME IN DURING APPELLATE PROCEEDINGS BUT HAS FAILED TO DEMONSTRATE THAT THE DEPOSITS WERE MADE OUT OF WITHDRAWALS FROM OTHER DECLARED BANK ACCOUNTS BELONGING TO HIM OR TO HIS BUSINESS. THOUGH THE APPELLANT HAS REPEATEDLY CLAIMED THAT EACH AND EVERY DEPOSIT STANDS EXPLAINED HE HAS NOT DONE ENOUGH TO DEMONSTRATE THE SAME. THE EXPLANATIONS GIVEN ARE MERE CLAIMS IN THE ABSENCE OF PROOF. THE ADDITION OF RS.81,48,424/- IS THEREFORE CONFIRMED. 6. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. THE LEARNED AR SUBMITTED THAT THE CIT(A) HAS IGNORED TO EXAMINE ANNEXURE-A WHICH REPRESENT THE DETAILS OF SOURCE OF CASH DEPOSITS. COPY OF ANNEXURE-A FILED BEFORE THE AO AND THE CIT(A) IS FURNISHED IN THE PAPER BOOK FILED BY THE ASSESSEE. THE PAPER BOOK FILED BY THE ASSESSEE COMPRISES OF 208 PAGES ENCLOSING THEREIN THE ITA NO.2577/BANG/2018 SRI K.L.CHANNAKESHAVA. 4 COPIES OF COMPUTATION OF INCOME, BALANCE SHEET, PROFITS AND LOSS ACCOUNT WITH THE SCHEDULE FOR ASSESSMENT YEARS 2014- 2015 AND 2013-2014, ETC. THE ASSESSEE HAS ALSO FURNISHED COPIES OF SUMMARY OF BANK STATEMENTS OF CANARA BANK SB ACCOUNT, VARIOUS OD ACCOUNTS AND THE CURRENT ACCOUNT, WHICH THE ASSESSEE WAS HAVING WITH THE CANARA BANK AND CORPORATION BANK. IT WAS SUBMITTED BY THE LEARNED AR THAT THE ASSESSEE WAS PROPRIETOR OF M/S.VOLTRON POWER SYSTEMS AND THE TOTAL TURNOVER FOR THE RELEVANT ASSESSMENT YEAR WAS RS.1,45,00,000, WHICH WAS DEPOSITED IN DIFFERENT BANK ACCOUNTS AND PERIODICAL WITHDRAWALS WERE PARTLY USED FOR DEPOSIT IN THE SAVING BANK ACCOUNT OF THE ASSESSEE MAINTAINED WITH CANARA BANK. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAD ALSO VARIOUS OD FACILITIES IN CANARA BANK AND THERE WAS PERIODICAL DEPOSITS AND RE-DEPOSITS INTO THE CANARA BANK SAVING BANK ACCOUNT. THE ASSESSEE ALSO FURNISHED CURRENT ACCOUNT MAINTAINED BY THE ASSESSEE WITH CANARA BANK FOR HIS BUSINESS TRANSACTIONS. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, SUBMITTED THAT THERE HAS BEEN LONG DELAY BETWEEN THE PERIOD OF WITHDRAWAL OF CASH AND DEPOSIT IN ASSESSEES SB ACCOUNT. CONSEQUENTLY, IT WAS STATED THAT THERE WAS NO PROPER EXPLANATION WITH REGARD TO THE SOURCE OF CASH DEPOSITS. THEREFORE, IT WAS CONTENDED THAT THE ITAT SHOULD NOT INTERFERE WITH THE ORDER OF THE CIT(A). THE LEARNED DR ALSO RELIED ON THE ORDER OF THE HYDERABAD BENCHES OF THE TRIBUNAL IN THE CASE OF MIR BASHEERUDDIN ALI KHAN V. ITO REPORTED IN [2014] 42 TAXMANN.COM 69 (HYDERABAD-TRIB.). ITA NO.2577/BANG/2018 SRI K.L.CHANNAKESHAVA. 5 8. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE A.O. IN PARA 3 OF THE ASSESSMENT ORDER, HAD HELD THAT THE CONTENTION OF THE ASSESSEE THAT THE SOURCE OF CASH DEPOSITS WAS OUT OF CASH WITHDRAWALS FROM VARIOUS BANK ACCOUNTS WITH CORPORATION BANK ACCOUNT NO.0025, CANARA BANK OD ACCOUNT NO.244, CANARA BANK CURRENT ACCOUNT NO.534 AND CANARA BANK SAVING BANK ACCOUNT NO.13692, CANNOT BE ACCEPTED, SINCE CASH WITHDRAWALS FROM VARIOUS BANKS IN APRIL 2013 WAS DEPOSITED IN JUNE 2013 AND SOME OF THE CASH WITHDRAWALS FROM JULY 2013 WERE DEPOSITED IN NOVEMBER 2013, DECEMBER 2013, JANUARY 2014 AND FEBRUARY 2014. ACCORDING TO THE A.O. FROM THE STATEMENT OF CASH DEPOSITS, IT IS CLEAR THAT THESE DEPOSITS WERE MADE AFTER 3 TO 4 MONTHS FROM THE DATE OF WITHDRAWALS AND THEREFORE, SOURCE OF CASH DEPOSITS IN SAVING BANK ACCOUNT IS NOT PROPERLY EXPLAINED. THE ASSESSEE HAS FILED A LETTER DATED 19.12.2016 IN WHICH THE COMPLETE DETAILS OF CASH WITHDRAWALS AND DEPOSITS FROM VARIOUS BANKS WERE FURNISHED. THE ASSESSEE HAS ALSO SUBMITTED THE DETAILS OF PROPRIETARY CONCERN M/S. VOLTRON POWER SYSTEMS, WHERE TURNOVER FOR THE CONCERNED ASSESSMENT YEAR WAS ABOUT RS.1,45,00,000, WHICH WAS DEPOSITED IN DIFFERENT BANK ACCOUNTS AND PERIODICAL WITHDRAWALS WERE PARTLY USED FOR DEPOSIT IN THE SAVING BANK ACCOUNT MAINTAINED BY THE ASSESSEE WITH CANARA BANK. THE ASSESSEE HAS ALSO FILED THE ABOVE DETAILS BEFORE THE CIT(A), BUT THE SAME WAS NEITHER EXAMINED NOR CONSIDERED. CONSEQUENTLY, THE ASSESSEE HAD FILED APPLICATION U/S 154 OF THE I.T.ACT. THE CIT(A) REJECTED THE APPLICATION U/S 154 OF THE I.T.ACT VIDE ORDER DATED 30.06.2018 ON THE GROUND ITA NO.2577/BANG/2018 SRI K.L.CHANNAKESHAVA. 6 THAT THE DETAILED WRITTEN SUBMISSIONS WERE FILED ON 23.01.2018, AND THEREFORE, NOT CONSIDERED IN THE APPELLATE ORDER, WHICH WAS PASSED ON 17.01.2018. ADMITTEDLY, THE ASSESSEES BOOKS OF ACCOUNT ARE AUDITED AND COPIES OF THE BOOKS OF ACCOUNT AUDITED ARE PLACED IN THE PAPER BOOK FILED BY THE ASSESSEE. IN THE INTEREST OF JUSTICE AND EQUITY, WE ARE OF THE VIEW THAT THE MATTER NEEDS TO BE EXAMINED DE NOVO BY THE A.O. ACCORDINGLY, THE ISSUE OF ADDITION OF RS.81,48,424 IS RESTORED TO THE FILES OF THE A.O. THE ASSESSEE SHALL COOPERATE WITH THE DEPARTMENT AND FURNISH NECESSARY DETAILS TO PROVE THE SOURCE OF CASH DEPOSIT. THE ASSESSING OFFICER SHALL AFFORD A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE AND PASS AN ORDER IN ACCORDANCE WITH LAW. IT IS ORDERED ACCORDINGLY. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 10 TH DAY OF FEBRUARY, 2021 . SD/- SD/- ( CHANDRA POOJARI ) ( GEORGE GEORGE K ) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE; DATED : 10 TH FEBRUARY, 2021. DEVADAS G* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(A)-6, BANGALORE. 4. THE PR.CIT-6, BANGALORE. 5. THE DR, ITAT, BENGALURU. 6. GUARD FILE. ASST.REGISTRAR/ITAT, BANGALORE